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THE GOLDBACK: AN ALTERNATIVE TO FIAT CURRENCY?

You will notice immediately on the Goldbacks that they feature only women. There is a significant amount of detail that went

By Jacob WolinskyPublished 4 years ago 5 min read
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THE GOLDBACK: AN ALTERNATIVE TO FIAT CURRENCY?
Photo by Igor Rodrigues on Unsplash

Goldback: State of the Market

At the time of writing, the S&P 500 was flat, and jobless claims fell far below official expectations. Secondly, the Federal interest rate was turning negative. Also, the measurement of Money Velocity reported that people are saving money more than spending it. As a result, this can adversely impact the US dollar and the GDP, creating the problem of inflation.

On the other hand, the gold price continues to grow and reaches new highs seemingly every day. Why is this happening? Basically, the gold price rises for the same reasons it usually does. Geopolitical unrest and events, waning faith in fiat currency, and the coronavirus are all major factors.

Currently, the gold price already grew 30% this year, so now it is on track for a great year similar to 1979. But if you are an investor in the stock market, hearing that inflation fears are driving up the precious metals prices might not put you in the best of spirits. Many new investors are entering the precious metals scene as a result, but many also lack direction. Are you worried about inflation and want to buy gold, but the gold price is off-putting? One solution is the Utah Goldback.

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A Solution: The Utah Goldback

The Utah Goldback is a brand new product that is not backed by gold—it is actually made with real gold. This is a voluntary complementary currency. Dr. Mark Voelker of the United Precious Metals Association said that it…

“…solves a 2,600-year-old problem in that gold can be spent in small interchangeable increments.”

The issue he remarks upon is people in the past had to pay in the weight of gold (or other metal). This also meant carrying around heavy, unsecured weight. But, the Goldback offers a solution: it is a small, spendable denomination of gold.

So why should this appeal to first-time buyers? Aside from the fact that it is easy to store and the first of its kind, the Goldbacks were made with the intention to provide an alternative currency to the US Dollar. More importantly, the Goldbacks have intrinsic value because they are made of real gold. Therefore, inflation does not affect its value. On top of that, this fractional piece of gold is more affordable for a wider range of investors, especially those on a budget!

While owning other forms of physical gold, like coins, can be a great investment decision, the Utah Goldbacks are smaller denominations. With a smaller face value that matches its gold content, the Goldbacks can carry the task of day-to-day commerce more adeptly. On top of that, if there comes a day when fiat currency is no longer valued, the Goldbacks could potentially be a model for new currency or an alternative currency itself.

History

So how did the Goldbacks get created? The founders of the company, Jeremy Cordon and Chris Jensen, set out with a mission to give people the choice of whether or not they want inflation to affect the value of their currency. Their aim is, one day, the Goldback will be used for purchasing everyday items like food and also for major investments like real estate.

If you are wondering how this form of currency is legal, you can thank the Utah Legal Tender Act of 2011. The General Counsel for the company is Lawrence Hilton, who penned the act and pushed for its passage. Under this act, certain gold and silver coins are legal tender in the state. The Goldback technically counts as a “coin”, and it also has the word “coin” on the Goldback itself. After the passage of this act, the Goldbacks are one of the few acceptable alternative forms of currency in the state.

When it came time to produce the Goldbacks, Jensen and Cordon turned to Valaurum for the task after pitching it in the earlier stages. After production, however, the United Precious Metals Association had to approve it. Although facing some pushback, the majority of the board accepted this new product. The only other product they accepted before the Goldback was the Minted 2015 American Silver Eagles, making this a daunting task. But the Goldbacks were approved.

FreedomFest 2019 demonstrated that there are plenty of buyers for the Goldbacks. Many waited in line to grab one for themselves. Considering their wonderful designs on real gold, it is not hard to see why.

The Design

You will notice immediately on the Goldbacks that they feature only women. There is a significant amount of detail that went into the design of the Goldback. For example, every tree you can see on them is native to Utah. The same thing goes for the featured animals. However, every woman is a representation of the Virtues. All the Goldbacks so far include Liberty (Libertas), Victory (Victoria), Justice (Justitia), Truth (Veritas), and Prudence (Prudentia).

These modernized renditions capture the Virtues as semi-modern women. Basically, each woman wears clothes that were popular throughout the history of Utah. For example, the $25 Utah Goldback features Victory “Victoria” dressed as a Suffragette.

Prudentia on the $1 Goldback, features Prudence as a Native American woman. She serves as a representation of the main Utah tribes. The $1 Goldback is also the smallest unit of physically tradeable gold on the market.

What makes the Goldbacks stand out is not only that they’re real gold, but also because they are all different sizes. This makes identification much simpler and more accessible for the visually impaired.

If you already have a gold collection, this brand new, innovative gold product can bolster your portfolio! With a lower cost, even with the main company producing the $1 Goldbacks at a loss, your collection can only grow from this unique investment opportunity. Plus, since these Goldbacks are fractional gold, you will not be paying the same amount for a 1 oz gold bar or coin that you would for a Goldback.

By Eric Gozenput

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